Today’s Key Market Drivers: 11th October 2018

“Dow Jones Futures Index plunges over 1000 points on Wednesday.”

US stock markets plunged on Wednesday with the Dow Jones having its biggest one day fall since February this year dropping over 800 points during trading hours but technically falling over 1000 points or close to 4% in one day. Why? For the very reasons, I’ve been sharing with you for the past number of days and weeks. US interest rates are rising, stock markets are at all-time highs and the US 10 Year Treasury Yield hitting 3.24% is an extremely attractive investment. Pure and simple traders are selling off some of their stock portfolios to protect risk and the pullback we are seeing is normal, it’s part of the cycle of financial markets and it has been expected for some time. Will it continue? The probability is yes and it would be extremely rare for the Asian and European trading sessions to buck the trend today. What we will likely see is more selling in the coming 24 hours and in today’s daily video update I share with you some key technical levels on the major stock indexes and currency crosses to keep an eye on. DO NOT fall in love with the market going down and overload on positions as right now is when novice traders lose fortunes. Sure, most of us have made some money and that’s great but I have learnt over many years that the moment you fall in love with your own thinking you are screwed. Chip away, manage risk appropriately and remain clear, calm and decisive.

What is alarming to me is how the US stock index futures markets reacted after the official close of the stock market. Traders kept selling US index futures with the Dow Jones falling 800 points during trading hours but falling another 200 points after the close. There were no buyers whatsoever sniffing around the lows thinking they might buy something cheap. The selling pressure accelerated into the closing bell and then continued to sell post the closing bell on futures markets. This rarely happens and I think is a sign of things to come today in the Asian trading session.

Forget any economic data numbers that are due to be released today, the market’s focus is on the stock market and will the sellers continue to sell. I hope they do. The US stock market has been due for a 5% to 10% correction for some time and we have a catalyst with US interest rates and after reviewing some notes I keep, my expectation is the sell off will continue well into November with a late Santa Clause rally leading into Xmas. Then another sell-off early in 2019. Let’s wait and see.

Any trade updates throughout the day will be sent via Trade Time. You can also follow my daily updates on Facebook, Twitter, Instagram by searching for TrainwithAndrew. Make sure you subscribe to the Andrew Barnett YouTube channel after watching today’s Sunrise video below.

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About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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